Fed's Logan warns inflation pressures persist, could be made worse
Federal Reserve (Fed) Bank of Dallas President Lorie Logan struck a nervous tone on Friday, warning that despite a rapidly-weakening labor market, a lot of potential policy moves could accidentally spark another round of renewed inflationary pressures.
Key highlights
Tariffs have been contributing to inflation.
I'm worried about non-housing services inflation that's been elevated and stuck there.
There are both upside and downside risks to my inflation outlook.
If labor market were to slow more than anticipate, could see more disinflation than currently expect.
The risks that tariff effects are more prolonged increase risk of rise in long-term inflation expectations.
Stimulating demand when labor market is broadly in balance would add to price pressures without increasing employment.
I'm cognizant of the risks to the labor market.
We really need to be cautious about further rate cuts.
Monetary policy is likely just modestly restrictive.
Right now, the Fed is furthest away on the inflation side.
Source : Fxstreet.com
